Broken links can kill a site faster than anything else. There is nothing, I repeat, NOTHING that a visitor hates more than clicking a link and getting a FILE NOT FOUND message. In many cases, that is the signal to ditch the whole thing and hit the back button to try the next site on the SERPs.
Many proxy servers can’t differentiate between a ‘hard’ 404, where the actual URL is not working (often caused by a broken link and out of date URL due to a simple page reconfiguration or change in the URL due to any number of reasons) or a ‘soft’ one which merely indicates that the remote host is down (meaning that it might work later) and this information doesn’t even get to the visitor who turns away in disgust.
Your site is permanently logged in their mind as ‘broken’, and you will have lost not only their business and all the business they might have referred, but any possible backlinks as well.
Solution #1: Check all of your links on a regular basis. Links in articles that you have posted, any other links you have managed to place out on the web, links from other sources to specific pages other then your home page, internal links, EVERY LINK!
If you have updated your content, and changed or removed any URL’s from your site, you may be losing traffic due to existing links not working any more. Other site owners that link to you should be contacted and given your updated link – they don’t want broken links on their site either.
You can check all the links in and out of your site by logging into your Google Webmaster Account and clicking on the site you wish to investigate. Check and double check all of your page to page links to be sure that your site is fully navigational, and triple check all of your inbound links; then take a peek at your outbound links as well.
Your error page should have:
Links to the site map and the home page. This is the easiest way to handle a 404.
A search box. If you have a site search, slap it on your 404 page. This can salvage some people who might otherwise bail.
A no frills, uncutesy look. Believe me, people are not in a happy bunnies and chickies mood when they get a 404. And don’t call it a 404 – not everyone is a geek and 90% of people will only know it stands for BROKEN.
Fix your 404, then fix your problems, and you won’t be losing customers to the next site on the SERPs